News & views from the American Coalition for Ethanol.

May 4, 2010

Guest editorial in response to "Beyond Corn Ethanol" series

This op-ed was written by American Coalition for Ethanol (ACE) member Ron Fagen, President & CEO of Fagen Inc. of Granite Falls, MN.

A
recent op-ed alleging that “the ethanol boom is over” and that “policies to
further the corn ethanol industry should not be supported” demands a response, both
because it is patently untrue and because my words were twisted and taken out
of context to justify the editorialist’s opinion about corn ethanol. I
respect that everyone is entitled to their own opinions. But, in the case
of the op-ed titled “Beyond Corn Ethanol” published on April 28, 2010 by
Minnesota 2020, neither the opinions nor the so-called facts expressed were
accurate.

It’s true that Fagen Inc. has partnered with farmers to build more than half of
all the ethanol plants in the U.S. It’s also true that technology
innovations have enabled corn farmers and ethanol producers to become
incredibly efficient stewards of resources. Today, corn farmers use fewer
inputs and less energy on fewer acres of land to produce more bushels of corn
than ever before. Case in point: in 2009, U.S. farmers planted 7 million
feweracres of corn than
in 2007, but they produced more
corn than in the previous record year of 2007 thanks to technology and yield
increases. At the same time, ethanol plants have reduced energy and water
use to become more sustainable and efficient. University studies indicate
that one gallon of ethanol contains more than two times the amount of energy
used to make it.

So it is not accurate – in fact, it is downright misleading – to suggest corn
ethanol has no future. Today, ethanol-blended fuel is the most affordable
and clean-burning alternative to gasoline. And more importantly, unlike
some other promising alternative fuels, we don’t have to wait for more ethanol
because it is here now as the only commercially viable substitute to fossil
fuels. In fact, this year U.S. ethanol producers will rank as our
nation’s third largest supplier of fuel on a gasoline-equivalent basis, behind
only Canada and Saudi Arabia, and ahead of Venezuela.
Ethanol has also triggered more economic prosperity in rural America than
anything else in my lifetime. It has enabled corn farmers to earn more
for their crops, and ethanol has given farmers and rural citizens the opportunity
to invest in locally owned production facilities, operations where the profits
stay in rural America. According to a report issued by the Minnesota
Department of Agriculture in 2008, the combined impact of corn and ethanol
production in Minnesota has generated $6 billion in economic activity and
impacted 26,000 jobs. Nationwide, ethanol supports 400,000 jobs across
the U.S. economy and generates more than $50 billion to our Gross Domestic
Product.
At the same time ethanol is becoming more efficient and making a positive difference
for the environment and U.S. energy security, oil is making a difference too –
a dangerous difference. At present, 5000 barrels of oil per day are
leaking from a deepwater well in the Gulf of Mexico and the spill is polluting
the shores of the U.S. Gulf Coast, threatening wildlife and the environment.
I run a construction company, and I am actively engaged in the development of
renewable energy from ethanol to wind to biomass power production facilities.
The opinion piece suggests that I have “changed focus” by moving away
from corn ethanol and that this should send a message to policy makers to shift
away from supporting corn ethanol as well. Nothing could be farther from
the truth. My family and my company
fully support the growth of ethanol and welcome the opportunity to construct
more ethanol plants. Unfortunately, government bureaucracy currently
limits corn ethanol from expanding and today’s installed capacity for corn
ethanol is maxed out under current law. In other words, the ethanol plants
in operation and currently under construction in the U.S. have the capability
to exceed the 15 billion gallon per year limit of production included in the
2007 Energy Bill. That’s right, Congress has capped the volume of corn
ethanol by allowing no more than 15 billion gallons of production to qualify
for the Renewable Fuels Standard. What’s more, at present the U.S.
Environmental Protection Agency (EPA) arbitrarily restricts the volume of
ethanol that can be blended into a gallon of gasoline to just 10 percent.
I am working with others to tackle these problems, but until or unless
EPA allows more ethanol in gasoline or Congress acts, there isn’t any market
space available to build new plants.
It is important to note that public policy is not only holding corn ethanol
back from unleashing its ability to provide the U.S. with cleaner and more
affordable fuel, but these restrictions also prevent the “next-generation” of
biofuels from becoming commercially available. I support both corn
ethanol and advanced biofuels and am disappointed that some try to pit corn
ethanol against advanced biofuel – we need both. As we employ technology
to drive down the process and capital costs associated with advanced biofuel,
let’s take advantage of the benefits of corn ethanol.
According to the U.S. Department of Agriculture, the amount of corn currently
stored on farms in the U.S. is about 4.6 billion bushels, which is larger than
the amount of corn that is expected to be processed into ethanol during the 2009/2010
marketing year. U.S. farmers can produce enough corn for feed, fuel, and
food, and U.S. ethanol producers can efficiently distill corn into
clean-burning renewable fuel and high-value livestock feed through distillers
grains.
Entrepreneurs in the U.S. are capable of replacing foreign oil with corn
ethanol and advanced biofuels from a variety of sources, but only if the policy
limitations are addressed by Congress and the Administration. That’s
where we ought to focus.

Comments

Guest editorial in response to "Beyond Corn Ethanol" series

This op-ed was written by American Coalition for Ethanol (ACE) member Ron Fagen, President & CEO of Fagen Inc. of Granite Falls, MN.

A
recent op-ed alleging that “the ethanol boom is over” and that “policies to
further the corn ethanol industry should not be supported” demands a response, both
because it is patently untrue and because my words were twisted and taken out
of context to justify the editorialist’s opinion about corn ethanol. I
respect that everyone is entitled to their own opinions. But, in the case
of the op-ed titled “Beyond Corn Ethanol” published on April 28, 2010 by
Minnesota 2020, neither the opinions nor the so-called facts expressed were
accurate.

It’s true that Fagen Inc. has partnered with farmers to build more than half of
all the ethanol plants in the U.S. It’s also true that technology
innovations have enabled corn farmers and ethanol producers to become
incredibly efficient stewards of resources. Today, corn farmers use fewer
inputs and less energy on fewer acres of land to produce more bushels of corn
than ever before. Case in point: in 2009, U.S. farmers planted 7 million
feweracres of corn than
in 2007, but they produced more
corn than in the previous record year of 2007 thanks to technology and yield
increases. At the same time, ethanol plants have reduced energy and water
use to become more sustainable and efficient. University studies indicate
that one gallon of ethanol contains more than two times the amount of energy
used to make it.

So it is not accurate – in fact, it is downright misleading – to suggest corn
ethanol has no future. Today, ethanol-blended fuel is the most affordable
and clean-burning alternative to gasoline. And more importantly, unlike
some other promising alternative fuels, we don’t have to wait for more ethanol
because it is here now as the only commercially viable substitute to fossil
fuels. In fact, this year U.S. ethanol producers will rank as our
nation’s third largest supplier of fuel on a gasoline-equivalent basis, behind
only Canada and Saudi Arabia, and ahead of Venezuela.
Ethanol has also triggered more economic prosperity in rural America than
anything else in my lifetime. It has enabled corn farmers to earn more
for their crops, and ethanol has given farmers and rural citizens the opportunity
to invest in locally owned production facilities, operations where the profits
stay in rural America. According to a report issued by the Minnesota
Department of Agriculture in 2008, the combined impact of corn and ethanol
production in Minnesota has generated $6 billion in economic activity and
impacted 26,000 jobs. Nationwide, ethanol supports 400,000 jobs across
the U.S. economy and generates more than $50 billion to our Gross Domestic
Product.
At the same time ethanol is becoming more efficient and making a positive difference
for the environment and U.S. energy security, oil is making a difference too –
a dangerous difference. At present, 5000 barrels of oil per day are
leaking from a deepwater well in the Gulf of Mexico and the spill is polluting
the shores of the U.S. Gulf Coast, threatening wildlife and the environment.
I run a construction company, and I am actively engaged in the development of
renewable energy from ethanol to wind to biomass power production facilities.
The opinion piece suggests that I have “changed focus” by moving away
from corn ethanol and that this should send a message to policy makers to shift
away from supporting corn ethanol as well. Nothing could be farther from
the truth. My family and my company
fully support the growth of ethanol and welcome the opportunity to construct
more ethanol plants. Unfortunately, government bureaucracy currently
limits corn ethanol from expanding and today’s installed capacity for corn
ethanol is maxed out under current law. In other words, the ethanol plants
in operation and currently under construction in the U.S. have the capability
to exceed the 15 billion gallon per year limit of production included in the
2007 Energy Bill. That’s right, Congress has capped the volume of corn
ethanol by allowing no more than 15 billion gallons of production to qualify
for the Renewable Fuels Standard. What’s more, at present the U.S.
Environmental Protection Agency (EPA) arbitrarily restricts the volume of
ethanol that can be blended into a gallon of gasoline to just 10 percent.
I am working with others to tackle these problems, but until or unless
EPA allows more ethanol in gasoline or Congress acts, there isn’t any market
space available to build new plants.
It is important to note that public policy is not only holding corn ethanol
back from unleashing its ability to provide the U.S. with cleaner and more
affordable fuel, but these restrictions also prevent the “next-generation” of
biofuels from becoming commercially available. I support both corn
ethanol and advanced biofuels and am disappointed that some try to pit corn
ethanol against advanced biofuel – we need both. As we employ technology
to drive down the process and capital costs associated with advanced biofuel,
let’s take advantage of the benefits of corn ethanol.
According to the U.S. Department of Agriculture, the amount of corn currently
stored on farms in the U.S. is about 4.6 billion bushels, which is larger than
the amount of corn that is expected to be processed into ethanol during the 2009/2010
marketing year. U.S. farmers can produce enough corn for feed, fuel, and
food, and U.S. ethanol producers can efficiently distill corn into
clean-burning renewable fuel and high-value livestock feed through distillers
grains.
Entrepreneurs in the U.S. are capable of replacing foreign oil with corn
ethanol and advanced biofuels from a variety of sources, but only if the policy
limitations are addressed by Congress and the Administration. That’s
where we ought to focus.